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Decomposition of Industrial Energy Consumption in Indian Manufacturing : The Energy Intensity Approach

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  • Sahu, Santosh
  • Narayanan, K

Abstract

Increasing energy consumption has been one of the major issues in the environmental and industrial economics in the context of global climate change. Recent literature has dealt with several methodological and application issues related to the technique of decomposing changes in industrial energy consumption. In this paper, we examine these issues in the context of another commonly adopted approach to decomposition of aggregate changes in energy intensity of Indian manufacturing industries. The industrial sector accounts for about 37 percent of the total final energy consumption in India. Of this the manufacturing sector consumes about 66 percent (2004-05). The manufacturing sector is one of the energy intensive industries among other industries in India. The scope of the study includes an empirical analysis of General Parametric Divisia Method. This paper follows the energy intensity approach rather the energy consumption approach. This method involves decomposition of the aggregate energy intensity index measured in terms of energy consumption per unit of output. The analysis also includes a comparison of the time series analysis versus the period-wise decomposition. The factors considered are changes in production structure and sectoral energy intensities. The results of the analysis confirm that the changes in sectoral energy intensity play a greater role in the variation in the total energy intensity of Indian Manufacturing compared to the changes in the production structure of the Industries.

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  • Sahu, Santosh & Narayanan, K, 2010. "Decomposition of Industrial Energy Consumption in Indian Manufacturing : The Energy Intensity Approach," MPRA Paper 21719, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:21719
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    2. Bagchi, Prantik & Sahu, Santosh Kumar & Kumar, Ajay & Tan, Kim Hua, 2022. "Analysis of carbon productivity for firms in the manufacturing sector of India," Technological Forecasting and Social Change, Elsevier, vol. 178(C).
    3. Fernández González, P. & Landajo, M. & Presno, M.J., 2014. "Multilevel LMDI decomposition of changes in aggregate energy consumption. A cross country analysis in the EU-27," Energy Policy, Elsevier, vol. 68(C), pages 576-584.
    4. Heidari, Hassan & Babaei Balderlou, Saharnaz & Ebrahimi Torki, Mahyar, 2016. "Energy Intensity of GDP: A Nonlinear Estimation of Determinants in Iran," MPRA Paper 79237, University Library of Munich, Germany.
    5. Akbar Ullah & Karim Khan & Munazza Akhtar, 2014. "Energy Intensity: A Decomposition Exercise for Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 53(4), pages 531-549.
    6. Liu, Hong & Wang, Chang & Tian, Meiyu & Wen, Fenghua, 2019. "Analysis of regional difference decomposition of changes in energy consumption in China during 1995–2015," Energy, Elsevier, vol. 171(C), pages 1139-1149.
    7. Govindan, Kannan & Kadziński, Miłosz & Sivakumar, R., 2017. "Application of a novel PROMETHEE-based method for construction of a group compromise ranking to prioritization of green suppliers in food supply chain," Omega, Elsevier, vol. 71(C), pages 129-145.
    8. Suvajit Banerjee, 2019. "Addressing the Drivers of Carbon Emissions Embodied in Indian Exports: An Index Decomposition Analysis," Foreign Trade Review, , vol. 54(4), pages 300-333, November.
    9. P. Fernández-González & M. Landajo & M.J. Presno, 2013. "Factors Influencing Changes In Aggregate Energy Consumption. An European Cross-Country Analysis," Regional and Sectoral Economic Studies, Euro-American Association of Economic Development, vol. 13(2), pages 18-30.
    10. Fernández González, P. & Presno, M.J. & Landajo, M., 2015. "Regional and sectoral attribution to percentage changes in the European Divisia carbonization index," Renewable and Sustainable Energy Reviews, Elsevier, vol. 52(C), pages 1437-1452.
    11. Fernández González, P. & Landajo, M. & Presno, M.J., 2013. "The Divisia real energy intensity indices: Evolution and attribution of percent changes in 20 European countries from 1995 to 2010," Energy, Elsevier, vol. 58(C), pages 340-349.
    12. Fernández González, P., 2015. "Exploring energy efficiency in several European countries. An attribution analysis of the Divisia structural change index," Applied Energy, Elsevier, vol. 137(C), pages 364-374.
    13. Wang, Yanqiu & Zhu, Zhiwei & Zhu, Zhaoge & Liu, Zhenbin, 2019. "Analysis of China's energy consumption changing using the Mean Rate of Change Index and the logarithmic mean divisia index," Energy, Elsevier, vol. 167(C), pages 275-282.
    14. Jain, Princy & Goswami, Binoy, 2021. "Energy efficiency in South Asia: Trends and determinants," Energy, Elsevier, vol. 221(C).
    15. Megha Jain & Simrit Kaur, 2023. "Determinants of Energy Intensity Trends in Indian Metallic Industry: A Firm-level Analysis," Vision, , vol. 27(3), pages 360-375, June.

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    More about this item

    Keywords

    Decomposition Methodology; Energy Intensity; Manufacturing Industries; India;
    All these keywords.

    JEL classification:

    • B23 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Econometrics; Quantitative and Mathematical Studies
    • Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy

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